Nike Jumps From Amazon, Instagram Copies TikTok, The Apple Services Bundle

Nike Jumps From Amazon
It what comes as no surprise, Nike has decided to longer sell directly on Amazon. A few things stand out to me with regard to this worth offering as food for thought.

The first is the similarity in feel this move has to Netflix, or Amazon, not participating in the Apple ecosystem via in app-payments. Neither of these company’s success was built of Apple’s App Store the way Spotify was, and Nike’s success was not built of Amazon’s commerce platform. Nike has a global brand and in many ways, never needed Amazon. On top of that, the selection they offered on Amazon was never quite good anyway nor remotely competitively priced. Nike’s statement was quite telling on their strategy here:

“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” the company said in a statement. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

While Nike has been well-positioned to control its own brand and its customer relationship for a long time, many other brands are not. Nike never really needed Amazon; they simply used it as a matter of convenience. It is smarter for Nike to continue to build out its Nike app experience and control their own online commerce destiny.

The high-level point here is the way in which companies can use platforms to build brands, then once they do that, do they pivot to their own channel. Interestingly, most direct-to-consumer brands avoid Amazon entirely and seek to use their apps, and Facebook/Instagram ads as their main way to build their brand, and there are many success stories here. But the big winner in all of this could be Shopify as it remains the favored platform for D2C brands, and if Amazon continues to create more hassles for their third party sellers than it’s worth, I can see more of them jump to Shopify and be more in control of their destiny.

In commerce, it is clear, while Amazon is a player, there is no one player to rule them all.

Instagram Copies TikTok
I admit I’m still smitten with TikTok. Largely because of how easy it is to see there and mindlessly scroll through content. This is one thing many other social companies need to learn about how discovery can happen. It’s not always great content, but it is easy to scroll through and generally pretty entertaining.

This is why it’s no shocker Instangram is moving to copy TikTok and if they succeed it will work. The biggest thing I hear from US Gen Z teens and even many adults on TikTok is how they hate to start over to rebuild their social grid. On Instagram, many have already invested many hours of time in building their social following of friends, family, etc., and this remains a major reason as Instagram copies other social platforms they will likely reap the rewards.

The trick for Instagram is not just to 1:1 copy features from TikTok but to understand why certain parts are successful. It’s a more strategically relevant move when analyzing the competitive landscape to understand what drives the behavior, not just what the behavior is. If Instagram can crack the TikTok code in this case and innovate on why certain things work in TikTok, then they have a true opportunity to slow its momentum and recapture that audiences are doing similar things on Instagram.

That being said, there is a lingering debate as to how many things a single app can absorb. Instagram may simply not be able to sustain such a complex list of features, and there may be a limitation to how much socially competitive features they can absorb. This and more is why studying this industry is so interesting because we always learn new things!

The Apple Services Bundle
Bloomberg put a report out today about a potential Apple bundle of their services. A meta point to make here is bundles work, bundles will work, and bundles are easy ways for consumers to perceive a multitude of value.

There is simply no way consumers will pay for a dozen a la carte video services. I’ve written often about how content has to be unbundled in order to refine it’s value and that is the stage we are in now. It will all be bundled again in some fashion. This market will be organized again by big media bundles. We just don’t know who or what that looks like yet, but it will happen.

In this context, an Apple bundle makes sense. Things like Apple News+, or even Arcade, are things that should come along for the ride. Apple Music and Apple TV+ are the things I’m confident will drive subscriptions and including News+ and Arcade help the strategic goal for Apple to keep people invested and engaged in their ecosystem.

Apple has all sorts of creative things they can build as a bundle, but the media/entertainment one I think exists as a stand-alone. Of course, they should keep a-la-carte options, but a bundle option should exist as well. My hunch is $20 a month for Apple TV+, Apple Arcade, Apple Music, and Apple News+ is a price that would move at scale.

Bottom line, a bundle will help Apple grow these services AND achieve its strategic objective for the ecosystem, and I’m not convinced a-la-carte only helps Apple strategic end game here.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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